Backdated 'staircase tax' bills 'unfair' to small businesses

12 Sep 2017

The Head of the Treasury Select Committee, Nicky Morgan, has labelled the sending of backdated business rates bills to small businesses with offices on multiple floors ‘unfair’.   

Termed the ‘staircase tax’, businesses with offices on multiple floors of a commercial property now receive separate business rates bills for each floor they occupy, provided the areas separating the offices are communal. Some firms in England and Wales have seen their business rates rise as a result.    

The Valuation Office Agency (VOA) determines firms’ business rates. In a letter to Melissa Tatton, the VOA’s Chief Executive, Ms Morgan enquires into what is being done to soften the impact of the rates, and how many businesses will be affected by the staircase tax.

Ms Morgan stated: ‘It seems unfair to tax businesses differently depending solely on whether the staircases between their rooms are communal or private.

‘It seems particularly unfair for the increase in rates to be backdated.’

Commenting on the staircase tax, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), said: ‘No small business should receive a sudden tax hike of 5,000% simply because a workplace has been separated, for years, by a communal area, stairway or lift.

‘Some small business owners are discussing whether to knock holes in their walls or stick a staircase on the outside of their premises.

‘This is no way to run a tax system in the 20th century, let alone the 21st. Ministers have the power to provide relief, and they should do this urgently – to correct this defect in the UK tax system.’